Regulation on minimum wage torments workers

VietNamNet Bridge – A paradox has been existing that the salaries of workers in foreign invested enterprises (FIEs) are even lower than that of workers in state owned enterprises. It is because of the unreasonable regulation on the minimum wage.

In Hanoi, the communes of Kim Chung and Van Noi in Dong Anh district are well known as the place which gathers immigrant workers. People, who live here, are the workers of the FIEs in the Thang Long Industrial Zone.

The workers, when asked about their income, all said that though the basic wage has increased to two million dong a month, it is still not enough for them to make ends met.

Luong Thi Hong from Phu Tho province, who works for Panasonic, said she gets 4.3 million dong a month, which includes basic wage and allowances. Hong works in accordance with production shifts, each shift lasts from 6 am to 6 pm.

She has to spend one million dong on the room rent, and about 1.5 million dong for meals. She also spends money on healthcare, petrol for motorbike and other expenses.

“No money is left. The salary is just enough to cover my basic needs, while I cannot save money to send to my parents,” Hong complained. “I am getting old, while I am leading an unstable life. I do not know when I can get married.”

Ha Thi Thuong from Phu Tho province is a worker of Daiwa. Besides the basic salary of 2.5 million dong a month, she gets the allowance of 500,000 dong. The total income of 3 million dong, Thuong said, is just enough to “feed her mouth.”

“Despite the low salary, I still have to stay in Hanoi. I would not be able to find a job, if I return to my home village,” Thuong said. “Getting married and having a stable life seems to be just a dream.”

Both Hong and Thuong said that FIEs all pay their workers higher than the basic wage levels stipulated by the State.

“We feel worried sick every time when hearing about the plan to raise the basic wage. In fact, we do not get higher salaries, because the actual salaries we receive are higher than the levels set up by the State,” Hong explained.

“Meanwhile, when hearing about the salary increases, food suppliers immediately raise the sale prices, while the landlords raise the room rent,” she added.

The regulation that has become out of date

According to Pham Van Thanh from the Hanoi Department of Labor, War Invalids and Social Affairs MOLISA, the average salaries FIEs pay to workers are even lower than that paid by domestic enterprises. In 2011, domestic businesses paid 4.65 million dong on average, while FIEs paid 4.03 million dong only.

However, Thanh said that the salary levels reported by FIEs may be untrue, and that it is really difficult to check the actual salaries at FIEs. The stipulated minimum wage levels are too low, while most FIEs consider the minimum wage to define the salaries for workers.

Also according to Thanh, there are 117,000 operational businesses, including 97,000 domestic businesses. After the decision to raise the minimum wage to 2 million dong took effect in October 2011, the strikes occurred at two FIEs, because the owners of the enterprises raised the basic wages, but reduced allowances.

When asked why the average salary of FIEs is lower than that of domestic enterprises, Tong Thi Minh from MOLISA said there are too many FIEs which have reported losses. In 2011, up to 60 percent of FIEs reported loss.

A survey of the Vietnam Labor Confederation shows that 35.6 percent of workers said their income is not enough to cover basic needs, while 44.7 percent said they have to practice thrift to cover their needs.